Major asset managers, including BlackRock and State Street, reportedly significantly increased their holdings of Adani Group dollar bonds following a tumultuous period triggered by a damning report from Hindenburg Research.
What Happened: This shift reflects the remarkable turnaround for Gautam Adani's empire, as it tackled debt, refinanced loans and secured $5 billion in equity investments in the aftermath of Hindenburg’s allegations of fraud in its January 24, 2023, report, which led to a rout in the conglomerate’s stocks. Adani consistently denied the accusations, and now a significant majority of the group's 15-dollar bonds trade above distressed levels.
According to a Bloomberg analysis, BlackRock doubled its position from $125 million to $250 million, while State Street’s holdings surged over 50% to $16 million. Lombard Odier's holding rose 20% to nearly $140 million, and Neuberger Berman Group LLC's increased about 42% to just over $40 million.
Notable investors such as Doubleline Capital LP and Jupiter Fund Management Plc also augmented their exposure to Adani debt, seizing what they perceived as a buying opportunity amidst the depressed prices of the group's dollar debt.
Why It Matters: The Adani Group had successfully repaid debt, reduced founders' share pledges, and undertook strategic measures to restore investor and lender confidence, resulting in a significant rebound. The combined market value of Adani companies more than doubled to $176 billion from a record low of $82 billion in February 2023.
While some investors, like UBS, reduced their holdings, and Temasek Holdings Pte. exited entirely, others are optimistic about Adani’s performance. S&P Global Ratings recently raised its outlook on Adani Ports & Special Economic Zone Ltd. and Adani Electricity Mumbai to stable from negative.
The data underscores the varied investor reactions and the broader positive trajectory of Adani’s financial recovery.
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